PetroViet­nam to Im­port 640,000 tons of crude oil

The Pak Banker - - Company & Boss News -

HANOI: Viet­nam Oil & Gas Group, the owner of the coun­try's only re­fin­ery, will im­port 640,000 met­ric tons of crude in the first six months of 2011, a 60 per­cent in­crease on to­tal over­seas pur­chases this year.

The state-owned com­pany, known as PetroViet­nam, will buy one 80,000 ton cargo of Malaysian crude each month from BP Plc, Nguyen Hoai Giang, gen­eral di­rec­tor of Binh Son Re­fin­ery and Petro­Chem­i­cal Co., the com­pany that runs the Dung Quat plant, said by tele­phone yes­ter­day. A to­tal of 400,000 tons of crude was im­ported in 2010, Giang said.

BP signed an agree­ment with PetroViet­nam in Jan­uary 2009 to sup­ply crude to Dung Quat, which has an an­nual ca­pac­ity of 6.5 mil­lion tons. Com­mer­cial pro­duc­tion at the plant started in Fe­bru­ary last year.

PetroViet­nam will buy an­other two 80,000 ton spot car­goes dur­ing the first half of 2011, Giang said. De­tails have yet to be de­cided, he added.

Dung Quat will use less do­mes­tic crude from the ag­ing Bach Ho field dur­ing the first half of 2011, Giang said. Im­ported crude will con­sti­tute 13 per­cent to 22 per­cent of the re­fin­ery's con­sump­tion.

"The rea­son for this is so that we can test dif­fer­ent op­er­a­tion modes with the most ef­fi­cient source of oil," Giang said. "Bach Ho oil is very ex­pen­sive in the world mar­ket. So in­stead of us­ing ex­pen­sive oil to make fuel, we can use a cheaper source of crude."

Dung Quat will pro­duce about 4.9 mil­lion tons of petroleum prod­ucts in 2011, PetroViet­nam said Nov. 9. It will tem­po­rar­ily halt pro­duc­tion for two months for main­te­nance in 2011, prob­a­bly in July and Au­gust.

More­over, Anadarko Petroleum Corp., along with its Kerr-McGee Corp. unit, may face li­a­bil­ity for clean­ing up 2,800 con­tam­i­nated sites as part of a law­suit brought by its spinoff Tronox Inc. and the govern­ment, a lawyer said.

Anadarko, one of the world's largest in­de­pen­dent oil and nat­u­ral-gas pro­duc­ers, was sued by its for­mer sub­sidiary, Tronox, which is now in bank­ruptcy, and by the U.S. En­vi­ron­men­tal Pro­tec­tion Agency for cleanup costs at 70 sites in­cluded in Tronox's spinoff in 2006.

Den­nis Wan­lass, Tronox's chief ex­ec­u­tive of­fi­cer, couldn't get an­swers to what the "en­vi­ron­men­tal foot­print" of the com­pany was when he joined in 2008, ac­cord­ing to Jef­frey Zeiger, an at­tor­ney for the Ok­la­homa City-based com­pany.

"Our ex­perts have been work­ing very, very hard to an­swer that ques­tion," Zeiger told U.S. Bank­ruptcy Judge Al­lan Grop­per yes­ter­day. "Now we've set­tled that there are around 2,800 sites that Tronox be­came ex­clu­sively li­able for through the IPO."

Duke McCall, a lawyer for Anadarko, said the govern­ment hasn't pro­duced doc­u­ments to prove its case.

"We're missing docs from 1,900 sites at which they al­lege there are li­a­bil­i­ties," McCall told the judge. "We're be­ing asked to de­fend against a claim for which we do not have the un­der­ly­ing fac­tual in­for­ma­tion," in­clud­ing the sites' lo­ca­tions, po­ten­tial cleanup costs, al­leged con­tam­i­na­tion and Anadarko's claimed con­nec­tion to the sites, McCall said.

Tronox has won court con­fir­ma­tion of a plan to re­or­ga­nize and is wait­ing for pub­lic com­ments on an en­vi­ron­men­tal set­tle­ment be­fore it ex­its bank­ruptcy pro­tec­tion.

Un­der the set­tle­ment, Tronox set aside $320 mil­lion to cover what it es­ti­mated were govern­ment en­vi­ron­men­tal claims of $1.4 bil­lion to $5 bil­lion. -Bloomberg

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